Healthcross Products Ltd commenced business on 1 May 2000. The company ahs approached their bankers for overdraft facilities. The bank has in turn demanded a cash flow statement in support of their request. The following information ahs been assembled for the purpose:
Projections
2000
Sales Sh ‘000’
Purchases (units)
May
200
5,000
June
200
5,000
July
380
9,000
August
560
20,000
September
620
12,000
It is established that 60% of the customers pay within the month of sales, 20% the month following the month of sale and 15% the month following while the balance is normally uncollectible.
The current purchase price of Sh 20 per unit is expected to rise by 20% on 1 July and by another 25% on 1 August. Disbursements to suppliers are made in full in the month following the month of purchase.
The company anticipates paying general and administration expenses at the rate of Sh 80,000 a month payable as incurred while obligation under a medium term lease payable at the commencement of each quarter amount to Sh 50,000 per month.
Corporation tax of Sh 150,000 is due in September while Sh 200,000 will be paid to a supplier for purchase of an asset in the same month.
The bank balance on 30 June 2000 is expected to be Sh 50,000 while the company intends to maintain a minimum monthly balance of Sh 100,000. Financing attracts interest at the rate of 24% per annum debited in the month following the month of utilizing the overdraft.
Required:
a) Sales/debtors’ collection schedule on a monthly basis for the months of May to September 2000. (9 marks)
b) Purchases schedule on a monthly basis for the months of May to September 2000.
(5 marks)
c) In columnar form, cash flow statement for the three months July to September 2000 on a monthly basis showing financing required, if any. (16 marks)
(Total: 30 marks)
Answers: 3
Other questions on the subject: Business
Business, 22.06.2019 11:40, avagracegirlp17zx2
On january 1, 2017, sophie's sunlounge owned 4 tanning beds valued at $20,000. during 2017, sophie's bought 3 new beds at a total cost of $14 comma 000, and at the end of the year the market value of all of sophie's beds was $24 comma 000. what was sophie's net investment
Answers: 3
Business, 22.06.2019 12:40, notorius315
Evan company reports net income of $232,000 each year and declares an annual cash dividend of $100,000. the company holds net assets of $2,130,000 on january 1, 2017. on that date, shalina purchases 40 percent of evan's outstanding common stock for $1,066,000, which gives it the ability to significantly influence evan. at the purchase date, the excess of shalina’s cost over its proportionate share of evan’s book value was assigned to goodwill. on december 31, 2019, what is the investment in evan company balance (equity method) in shalina’s financial records?
Answers: 2
Business, 22.06.2019 17:00, whitakers87
Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to:
Answers: 2
Business, 22.06.2019 19:40, yoyo80431
Which term describes an alternative to car buying where monthly payments are paid for a specific period of time, after which the vehicle is returned to the dealership or bought? a. car financing b. car maintenance c. car leasing d. car ownership
Answers: 3
Do you know the correct answer?
Healthcross Products Ltd commenced business on 1 May 2000. The company ahs approached their bankers...
Questions in other subjects:
History, 23.06.2019 00:30
Mathematics, 23.06.2019 00:30
History, 23.06.2019 00:30
Mathematics, 23.06.2019 00:30
Mathematics, 23.06.2019 00:30
